Life and health reinsurance
Life and health reinsurance
| Key figures for life and health reinsurance | ||||||||
|---|---|---|---|---|---|---|---|---|
| in EUR million | 2014 | 20131 | ||||||
| 1.1. – 31.3. | 1.4. – 30.6. | +/– previous year | 1.1. – 30.6. | +/– previous year | 1.4. – 30.6. | 1.1. – 30.6. | ||
| Gross written premium | 1,516.7 | 1,470.2 | -6.3% | 2,986.9 | -4.6% | 1,569.4 | 3,129.7 | |
| Net premium earned | 1,281.0 | 1,187.9 | -15.1% | 2,469.0 | -11.4% | 1,398.5 | 2,787.3 | |
| Investment income | 152.0 | 147.6 | -3.7% | 299.5 | -5.1% | 153.3 | 315.6 | |
| Operating result (EBIT) | 65.6 | 89.2 | +183.9% | 154.8 | +15.7% | 31.4 | 133.8 | |
| Net income after tax | 43.4 | 72.0 | +193.5% | 115.4 | +15.9% | 24.5 | 99.6 | |
| Earnings per share in EUR | 0.36 | 0.60 | +193.5% | 0.96 | +15.9% | 0.20 | 0.83 | |
| Retention | 84.5% | 81.7% | 83.1% | 89.3% | 89.6% | |||
| EBIT margin2 | 5.1% | 7.5% | 6.3% | 2.2% | 4.8% | |||
| 1 Adjusted pursuant to IAS 8 (cf. Section 2 of the notes) 2 Operating result (EBIT)/net premium earned | ||||||||
Profitability in life and health reinsurance showed a pleasing improvement in the first half of the year under review compared to the previous year’s period. Promising business opportunities opened up around the world despite continuing tensions on capital markets.
As in the first quarter of 2014, our US Financial Solutions business delivered another thoroughly positive profit contribution. Our US Mortality business improved sharply in the second quarter, consequently beating our expectations in the current reporting period. Similarly, our business activities in France and the Scandinavian countries as well as in Central and Eastern Europe fared better than forecast and hence played a positive part in the result.
Special mention should be made of the closing of another block transaction for longevity risks in the United Kingdom in the second quarter just ended. Pension liabilities of some EUR 2 billion were transferred under the transaction. In this context we assume the bulk of the pension obligations and carry only the biometric risk, i. e. the risk that pension payments may have to be made for longer than expected. We anticipate gross premium income of EUR 43 million from this transaction for the current year and EUR 86 million for 2015.
Total gross premium in life and health reinsurance amounted to EUR 3.0 billion (EUR 3.1 billion) as at 30 June 2014. This is equivalent to a decline of 4.6% relative to the previous year’s period; the reduction would have been just 1.8% on a currency-adjusted basis. Owing to a lower retention of 83.1% (89.6%), net premium contracted more sharply by 11.4% to EUR 2.5 billion (EUR 2.8 billion); adjusted for currency translation effects, the decrease would have been 8.9%.
Investment income including interest on deposits dipped slightly on account of the protracted low interest rate level and came in at EUR 299.5 million (EUR 315.6 million) for the reporting period just ended. The performance of the embedded ModCo derivatives in the period under review showed a modestly positive change to EUR 4.6 million (EUR 0.8 million).
The operating profit (EBIT) in life and health reinsurance climbed to a very pleasing EUR 154.8 million (EUR 133.8 million) as at 30 June 2014. In terms of the EBIT margin, this is equivalent to a return of 4.8% for our Financial Solutions and Longevity business – thereby comfortably beating the targeted 2%. The EBIT margin for Mortality and Morbidity business rallied to reach 7.1% in the period under review and hence also surpassed the target figure of 6%. Group net income improved by a substantial 15.9% to EUR 115.4 million (EUR 99.6 million). Earnings per share amounted to EUR 0.96 (EUR 0.83).